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Sept. 24, 2018, 12:21 p.m.
Business Models

Aiming to attract buyers who aren’t cryptocurrency nerds, Civil is offering a way to buy its tokens with regular old cash

And it’ll need a new wave of buyers in order to reach its goals.

Depending which hyperbolic headlines you believe, blockchain journalism startup Civil is going to “save journalism,” “fix journalism,” “make journalism more inclusive,” “make honest journalism financially viable again,” or “rebuild the crumbling economy of journalism.”

Or maybe it’s “reinventing newsrooms,” “reimagining the news,” or “fostering the next generation of news media.” Perhaps it’s “the future of media,” or maybe “journalism’s savior.”

Or, in Civil’s own words, it’s “building the new economy for journalism” and “a bold rebuke to journalism’s status quo.”

But nobody said it was going to be easy.

Civil has been running its initial coin offering — think IPO for cryptocurrencies — since September 17, just over a week. In that time, it’s drawn lots of complaints about the baroque and buggy process one must go through to actually get your virtual hands on the virtual CVL tokens that are Civil’s virtual currency. John Keefe — a professional bot-builder, fer cryin’ out loud — outlined his struggles for us last week; other non-dummies have followed suit, like The New Yorker’s Adam Davidson:

Or Dan Sinker, until recently head of Knight-Mozilla OpenNews:

Many have worried about the winnowing effect of a difficult process on a platform that aims to be decentralized:

Civil staffers feel their pain:

And of course some people have made it through!

But now Civil thinks it has a solution to much of the cryptocomplexity in its buying process. In an email to the Civil-curious, cofounder Matt Coolidge acknowledged the difficulties and offered a new path:

On the one hand, many people tried to participate in the Civil token sale this week (including many of you, so thank you!). On the other hand, many others have struggled to navigate the 44 steps, including multiple websites, days-long waiting periods, unfamiliar brands/apps, and the fact that this is new territory for basically everyone.

So we made it easier by simplifying the process as much as we could: we’re making it possible to buy CVL tokens using direct payments.

Civil is now accepting payment via electronic check or wire transfer, enabling direct cash-to-CVL transactions instead of having to first purchase ETH through Coinbase and Gemini.

In other words, instead of first buying one cryptocurrency (Ethereum) in order to buy another (CVL), you can just use…non-cryptocurrencies (old-fashioned things like dollars) to buy CVL.

Coolidge notes the effort Civil made to try to get people on board with the old way:

Virtually all token sales to date have used ETH to conduct the transactions. There are both technical and “trustless” reasons for doing it this way, but it means there’s a high barrier to entry for everyone who’s never bought or used cryptocurrency before.

Our original attempt to sell CVL tokens followed this playbook, and we hoped we could successfully guide enough people through the process without too many headaches. We offered daily webinars over the past two months to nearly 1,500 registrants for this exact purpose. In the end, some of you made it to the finish line, but many more of you struggled even with the extra support. Totally understandable!

So we’re offering direct payment channels that circumvent ETH altogether. This is much more manual on our side, and it makes us more “centralized” than other token sales, but we think the trade-off is worth it for a smoother user experience.

The move to a smoother process comes at a time where it’s unclear whether Civil will be able to pull this token sale off. Civil will need to generate at least $8 million in this initial coin offering for the sale to go forward. (If they fall short, everyone gets their money back.) As of right now, one week and about two hours into the sale, it’s only raised $1,264,841.

If the remaining 21 days of the sale go at the same rate as the first 7, then Civil won’t even touch $4 million, much less $8 million.

But that total’s a bit misleading too. Of that $1.26 million, the overwhelming majority — about 87 percent — was bought by a single entity.

In two purchases, this man/woman/child/company/thing purchased $1.22 million worth of CVL.

(Nerd note: Wondering how $1.22 million can be “only” 87 percent of $1.26 million? The $1.22 million number is based off of a live price for Ethereum, which fluctuates all the time. It’s down almost 5 percent so far today, for instance. It appears Civil is quoting a non-floating sum for its official sales count. Perhaps the most precise way to describe the two purchases would be for 2,362.184693501745 ETH and 2,849.709760363592757 ETH. Together they make up 87.3 percent of the 5,970.97 ETH collected to date.)

If the whale behind those two big buys keeps pumping money in, Civil will hit its target with no problem. But if you take that one entity out, Civil has raised only about $176,500 from everyone else thus far, and that pace won’t get them within shouting distance of their goal.

So if you’ve wanted to get involved in the Civil project but been scared off by the complexity — now’s your time.

Illustration via Vecteezy.

POSTED     Sept. 24, 2018, 12:21 p.m.
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